VAT – SPECIAL SCHEME FOR TRAVEL AGENTS

VAT – SPECIAL SCHEME FOR TRAVEL AGENTS

The Court of Justice of the European Union, in its judgment of September 26, 2013
(Case C-189/11), has declared contrary to the VAT Directive 2006/112/EC some of the interpretations given for several Estates (among them Spain) in order to apply the special scheme for travel agents (TOMS) in the VAT.

In its judgment, the Court holds that:

¾ This scheme should be applicable to journeys sold by retail agencies acting in their own name, even when the travel services have been organized by wholesale agents.

¾ The VAT included in the invoice will be the actual VAT charged to the customer
and not an estimated VAT. In this way, the taxpayer only can deduct the VAT
borne as long as the VAT is aligned with this actual VAT.

¾ The taxable amount (margin) should be calculated by referring to each single
service provided by the travel agent, and not on an overall basis.

Additionally, the Court interprets that the term ‘traveler’ included in the Directive must be understood in the broad sense of the word and not only like a final customer. Thus, this scheme will apply to journey sold to any customer other than travelers.

In this respect, the Court urges to the Spanish Tax Administration to modify the
wording given to their internal VAT’s Laws.

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